De-Dollarization Spikes

Venezuela Stops Accepting Dollars for Oil Payments

The Burning Platform (June 11 2016)

Zero Hedge (September 14 2017)

Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight?

Apparently confirming what President Maduro had warned {1} following the recent US sanctions, The Wall Street Journal reports {2} that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.

As we previously noted, {1} Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the US dollar next week. According to Reuters, {3}

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar”, Maduro said in a multi-hour address to a new legislative “superbody”. He reportedly did not provide details of this new proposal.


Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro”, Maduro also said.



* * * * *




And today, as The Wall Street Journal reports {2}, in an effort to circumvent US sanctions, Venezuela is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy said.

Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.

The state oil company Petroleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.

The new payment policy hasn’t been publicly announced, but Vice President Tareck El Aissami, who has been blacklisted by the US, said Friday, “To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar”.


There is no major market reaction for now – a modest bid to Bitcoin and some weakness in EUR and Gold (seems someone wants this to look like nothing).

However, as Nomura debt analyst Siobhan Morden warns:

You can say whatever you want for your domestic propaganda and make it look like you’re retaliating against the US … This political posturing will only be to their detriment.


So what happens if Europe also sanctions Venezuela? Will Rubles or Yuan … or Gold be the only way to buy Venezuela’s oil?

* * * * *


This decision by the nation with the world’s largest proven oil reserves comes just days after China and Russia unveiled the latest Oil/Yuan/Gold triad at the latest BRICS conference {4}.

It’s when President Putin starts talking {5} that the BRICS reveal their true bombshell. Geopolitically and geo-economically, Putin’s emphasis is on a “fair multipolar world”, and “against protectionism and new barriers in global trade”. The message is straight to the point.

Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.


“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

Beijing is ready to step up the game. Soon China will launch a crude oil futures contract {6} priced in yuan and convertible into gold.

This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.

Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.

The new triad of oil, yuan, and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.

Russia & China – via the Russian Central Bank and the People’s Bank of China – have been developing ruble-yuan swaps for quite a while now.

Once that moves beyond the BRICS to aspiring “BRICS Plus” members and then all across the Global South, Washington’s reaction is bound to be nuclear (hopefully, not literally).

Washington’s strategic doctrine rules Russia & China should not be allowed by any means to be preponderant along the Eurasian landmass. Yet what the BRICS have in store geo-economically does not concern only Eurasia – but the whole Global South.

Sections of the War Party in Washington bent on instrumentalizing India against China – or against Russia & China – may be in for a rude awakening. As much as the BRICS may be currently facing varied waves of economic turmoil, the daring long-term roadmap, way beyond the Xiamen Declaration, is very much in place.

* * * * *


Having threatened China today with exclusion from SWIFT, we suspect Washington is rapidly running out of any great ally to sustain the petrodollar-driven hegemony (and implicitly its war machine). Cue the calls for a Venezuelan invasion in 3 … 2 …1 … !








Categories: Uncategorized

America’s Weapons

The Dollar and the Drone

by Brian Maher (September 13 2017)

Zero Hedge (September 14 2017)

It was said that “the guinea and the gallows” were the true instruments of British imperial power.

The guinea represented the coined wealth of Great Britain.

The gallows represented its … constabulary zeal in policing restless natives.

This is the 21st century of course … a time of enlightenment.

Today’s instruments of imperial power are no longer the guinea and the gallows.

No. Today’s instruments of imperial power are “the dollar and the drone”.

The dollar and the drone are America’s weapons.

Like the 19th-century pound (which replaced the guinea), today’s dollar is the world’s reserve currency.

Like the 19th-century pound, the dollar finances some two-thirds of global trade.

And the gallows?

Britain hanged its foreign trouble. America explodes its own in drone attacks.

Here is civilization; here is progress.

The sun eventually sank on the British Empire … the gallows came down … and the pound lost its global reserve status.

The US will have its drones. But is its other weapon, the dollar, close to losing global reserve status?

Recent developments may tell …

The global oil trade has centered on the dollar since 1974 when Saudi Arabia agreed to enthrone the dollar as the currency of the oil market.

If it was oil you wanted … it was dollars you needed.

But now China – world’s top oil importer – is preparing to create an oil market that bypasses the dollar entirely.

The plan would let China buy oil from Russia and Iran with its own currency, the yuan.

But the yuan is not a major reserve currency like the dollar.

Under this plan, Russia and Iran would be able to swap yuan for an asset far more desirable than Chinese scraps of paper – gold itself.

Perhaps that explains why China’s been hoarding so much gold in recent years?

Jim Rickards says this system marks the beginning of the end for the petrodollar:

China, Russia, and Iran are coordinating a new international monetary order that does not involve US dollars. It has several parts, which together spell dollar doom. The first part is that China will buy oil from Russia and Iran in exchange for yuan.


The yuan is not a major reserve currency, so it’s not an especially attractive asset for Russia or Iran to hold. China solves that problem by offering to convert yuan into gold on a spot basis on the Shanghai Gold Exchange …

This marks the beginning of the end of the petrodollar system that Henry Kissinger worked out with Saudi Arabia in 1974 after Nixon abandoned gold.


But it’s not only China, Russia, and Iran that are out to dethrone King Dollar.

They’re joined by the rest of the “BRICS” nations – Brazil, India, South Africa.

Together they represent 25% of global economic output.

At last week’s annual BRICS summit in China, members announced full-throated support for China’s plan.

The message, clear as gin: The dollar’s days of “exorbitant privilege” must end.

And yesterday brought news that could further accelerate China’s de-dollarization plans …

Treasury Secretary Steve Mnuchin announced the US would consider locking China out of the international dollar system if Beijing doesn’t cooperate with new sanctions against North Korea:

If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system. And that’s quite meaningful.


“Meaningful” might be one word for it. “Menacing” would be another.

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a network that facilitates trillions of dollars in international money transfers each year.

It is the oil that lubricates the machinery of the international financial system – or as Jim Rickards styles it, “the oxygen supply that keeps the global financial system alive”.

And to cut off China’s oxygen?

“That is why China buys gold”, Jim Rickards tweeted this morning from London.

Our colleague Dave Gonigam of The 5 Min. Forecast half-jestingly wonders, “Is the Trump administration trying to kill off the US dollar’s status as the globe’s reserve currency?”

Of course, the dollar will not lose reserve status tomorrow, next week, next year.

But the direction of travel seems clear enough.


In 2000, dollar assets were about seventy percent of global reserves. Today, the comparable figure is about 62%. If this trend continues, one could easily see the dollar fall below fifty percent in the not-too-distant future.


How Does One Go Bankrupt?

Slowly at first, said Hemingway – then all at once.

That’s how the dollar will likely lose its reserve status … slowly at first … then all at once …

Categories: Uncategorized

Suddenly, “De-Dollarization” is a Thing

by John Rubino (September 16 2017)

Zero Hedge (September 16 2017)

For what seems like decades, other countries have been tiptoeing away from their dependence on the US dollar.

China, Russia, and India have cut deals in which they agree to accept each others’ currencies for bi-lateral trade while Europe, obviously, designed the euro to be a reserve asset and international medium of exchange.

These were challenges to the dollar’s dominance, but they weren’t mortal threats.

What’s happening lately, however, is a lot more serious.

It even has an ominous-sounding name: de-dollarization. Here’s an excerpt from a much longer article by “strategic risk consultant” F William Engdahl:


Gold, Oil, and De-Dollarization? Russia and China’s Extensive Gold Reserves, China Yuan Oil Market

(Global Research) – China, increasingly backed by Russia – the two great Eurasian nations – are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it.

So long as Washington dirty tricks and Wall Street machinations were able to create a crisis such as they did in the Eurozone in 2010 through Greece, world trading surplus countries like China, Japan, and then Russia, had no practical alternative but to buy more US Government debt – Treasury securities – with the bulk of their surplus trade dollars. Washington and Wall Street could print endless volumes of dollars backed by nothing more valuable than F-16s and Abrams tanks. China, Russia and other dollar bond holders in truth financed the US wars that were aimed at them, by buying US debt. Then they had few viable alternative options.

Viable Alternative Emerges

Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989 – Russia and China – are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today.

For several years both the Russian Federation and the Peoples’ Republic of China have been buying huge volumes of gold, largely to add to their central bank currency reserves which otherwise are typically in dollars or euro currencies. Until recently it was not clear quite why.

For several years it’s been known in gold markets that the largest buyers of physical gold were the central banks of China and of Russia. What was not so clear was how deep a strategy they had beyond simply creating trust in their currencies amid increasing economic sanctions and bellicose words of trade war out of Washington.

Now it’s clear why.

China and Russia, joined most likely by their major trading partner countries in the BRICS (Brazil, Russia, India, China, South Africa), as well as by their Eurasian partner countries of the Shanghai Cooperation Organization (“SCO”) are about to complete the working architecture of a new monetary alternative to a dollar world.

Currently, in addition to founding members China and Russia, the SCO full members include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and most recently India and Pakistan. This is a population of well over three billion people, some 42% of the entire world population, coming together in a coherent, planned, peaceful economic and political cooperation.

Gold-Backed Silk Road

It’s clear that the economic diplomacy of China, as of Russia and her Eurasian Economic Union group of countries, is very much about realization of advanced high-speed rail, ports, energy infrastructure weaving together a vast new market that, within less than a decade at present pace, will overshadow any economic potentials in the debt-bloated, economically stagnant OECD countries of the EU and North America.

What until now was vitally needed, but not clear, was a strategy to get the nations of Eurasia free from the dollar and from their vulnerability to further US Treasury sanctions and financial warfare based on their dollar dependence. This is now about to happen.

At the September 5 annual BRICS Summit in Xiamen, China, Russian President Putin made a simple and very clear statement of the Russian view of the present economic world. He stated, “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

To my knowledge he has never been so explicit about currencies. Put this in context of the latest financial architecture unveiled by Beijing, and it becomes clear the world is about to enjoy new degrees of economic freedom.

China Yuan Oil Futures

According to a report in the JapanNikkei Asian Review, China is about to launch a crude oil futures contract denominated in Chinese yuan that will be convertible into gold. This, when coupled with other moves over the past two years by China to become a viable alternative to London and New York to Shanghai, becomes really interesting.

China is the world’s largest importer of oil, the vast majority of it still paid in US dollars. If the new Yuan oil futures contract gains wide acceptance, it could become the most important Asia-based crude oil benchmark, given that China is the world’s biggest oil importer. That would challenge the two Wall Street-dominated oil benchmark contracts in North Sea Brent and West Texas Intermediate oil futures that until now has given Wall Street huge hidden advantages.

That would be one more huge manipulation lever eliminated by China and its oil partners, including very specially Russia. Introduction of an oil futures contract traded in Shanghai in Yuan, which recently gained membership in the select IMF SDR group of currencies, oil futures especially when convertible into gold, could change the geopolitical balance of power dramatically away from the Atlantic world to Eurasia.

In April 2016 China made a major move to become the new center for gold exchange and the world center of gold trade, physical gold. China today is the world’s largest gold producer, far ahead of fellow BRICS member South Africa, with Russia number two.

Now to add the new oil futures contract traded in China in Yuan with the gold backing will lead to a dramatic shift by key OPEC members, even in the Middle East, to prefer gold-backed Yuan for their oil over inflated US dollars that carry a geopolitical risk as Qatar experienced following the Trump visit to Riyadh some months ago. Notably, Russian state oil giant, Rosneft just announced that Chinese state oil company, CEFC China Energy Company Ltd Just bought a fourteen percent share of Rosneft from Qatar. It’s all beginning to fit together into a very coherent strategy. {1}


Meanwhile, in Latin America:

De-Dollarization Spikes – Venezuela Stops Accepting Dollars For Oil Payments

(Zero Hedge) – Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight?

Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.

As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the US dollar next week. According to Reuters, “Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar”, Maduro said in a multi-hour address to a new legislative “superbody“. He reportedly did not provide details of this new proposal.

Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro”, Maduro also said.

The state oil company Petroleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner. {2}


This first step towards one or more gold-backed Eurasian currencies certainly looks like a viable and – for a lot of big players out there – welcome addition to the global money stock.

Venezuela, meanwhile illustrates the growing perception of US weakness. It used to be that a small country refusing to take dollars could expect regime change in short order. Now, maybe not so much.

Combine the above with the emergence of bitcoin and its kin as the preferred monetary asset of techies and libertarians, and the monetary world suddenly looks downright multi-polar.




Categories: Uncategorized

Why Nobody Can Trust Facebook

by Tyler Durden


Zero Hedge (September 11 2017)

It becomes harder and harder to overstate the corruption and treachery of the online ad industry. Lord knows I’ve tried.

Among its other accomplishments, Facebook has become famous for its lunatic metrics and bizarre rationalizations.

You would think a company that built its business on the promise of putting sophisticated data to work for advertisers would have the sense not to release numbers that are patently ridiculous.

But time {1} and again {2} Facebook has undermined its credibility by making claims that are easily proven to be false, and then defended these claims with statements that are absurd.

This week it was reported that Facebook was claiming to reach 41 million Americans between the ages of 18 and 24. If Facebook reached every American between 18 and 24 they’d still be 10 million short. There are only 31 million of them.

But Facebook’s ability to reach imaginary people isn’t just limited to its home base here in the US. According to their metrics, they have also developed the amazing technology to reach non-existent people all over the world.

Below is a chart from AdNews {3} in Australia that sums up Facebook’s “branded storytelling”.

We are so used to bullshit from the online ad industry that this latest round of nonsense should surprise no one.


The online ad industry – the most corrupt and fraud-laden medium anyone’s ever seen – famously gave us the wonderful acronym NHT for Non-Human Traffic. Now Facebook has given us NEP’s – Non-Existing People.

Facebook has been ridiculed all over the world for this obvious fakery. And they will pay the exact same price they’ve paid every time they’ve been found to be lying about their numbers – nothing, nada, zilch. The marketing and advertising industries have reached a point of such exquisite incompetence that nothing any of these creeps does has any consequences. They are liars and we are fools.

I loved Facebook’s explanation for their metrics:

They are designed to estimate how many people in a given area are eligible to see an ad a business might run. They are not designed to match population or census estimates.


There must be a planet on which that preposterous nonsense makes sense, but I’ll be damned if I know where it is.

Is it any wonder Facebook is fighting to the bitter end to block third-party monitoring and auditing of its numbers? If the numbers they brazenly release to the public are this dishonest, can you imagine the horseshit they feed their credulous clients in private?





Categories: Uncategorized

The CIA and Drugs, Inc …

… a Covert History

by Douglas Valentine

CounterPunch (November 07 2014)

Gary Webb was a good investigator. He linked a drug dealer in Los Angeles, through Contra suppliers, to CIA officers and Republican politicians. His editor let the story rip, and the “Dark Alliance” series made a mighty impact on Black Americans, who saw it as evidence that the ruling class was as racist as ever.

Webb stuck a stake in the evil heart of the national security state and embarrassed the CIA’s contacts in the mainstream media. All of which was unforgivable. Pressure was applied, history re-written, and Webb, in despair, apparently committed suicide.

The irony, of course, is that Webb had exposed only a small part of the story. The fact of the matter is that the US government has always managed large portions of the illicit, international drug business, and was doing so long before the CIA came into existence.

Documented cases abound, like the Opium Scandal of 1927, in which a “former” US Attorney in Shanghai provided a Chinese warlord with 6500 Mausers in exchange for $500,000 worth of opium.

Two years later, US Customs inspectors found a huge quantity of opium, heroin, and morphine in the luggage of Mrs Kao, the wife of a Nationalist Chinese official in San Francisco. At which point Secretary of State Henry L Stimson hustled Chiang Kai-shek’s ring of drug dealing diplomats out of the country.

The State Department likewise protected a ring of drug smugglers in 1934 and thus allowed heroin to pour into New Orleans. Two historians said about the Honduran Drugs-For-Guns case: “the defense of the Western hemisphere against the Axis powers … reduced to insignificance clandestine attempts to link the managerial personnel of a major cargo airline to smuggling” {1}.

As it was in the beginning, it is now and ever shall be: the ruling class’s power resides in its control of the criminal underworld; and since 1947, it has been the CIA’s job to advance and protect the conspiracy.

Consider the Federal Narcotic Bureau’s (“FNB”) drug conspiracy case on Bugsy Siegel, which included Lucky Luciano and Meyer Lansky, both of whom had provided services to the US government during the war. The conspiracy had its inception in 1939 when, at Lansky’s request, sexy Virginia Hill moved to Mexico and seduced a number of Mexico’s “top politicians, army officers, diplomats, and police officials” {2}.

Hill came to own a nightclub in Nuevo Laredo and made frequent trips to Mexico City with Dr Margaret Chung, an alleged prostitute and abortionist, honorary member of the Hip Sing T’ong, and the attending physician to the Flying Tigers – the private airline the US government formed to fly supplies to Chiang Kai-shek’s forces in Kunming, a city described as infused with spies and opium. As the FBN was well aware, Dr Chung was “in the narcotic traffic in San Francisco” {3}.

Chung took large cash payments from Siegel and delivered heroin to Hill in New Orleans, Las Vegas, New York, and Chicago. And yet, despite the fact that West Coast FBN agents kept her under surveillance for years, they could never make a case against her, because she was protected by the American military establishment. Indeed, Siegel’s murder in 1947 may have been a government hit designed to protect its sanctioned Kuomintang (“KMT”)-Mafia drug operation out of Mexico. As Peter Dale Scott observed, right after Bugsy was squashed, Mexico’s intelligence service, the DFS, formed relations with the top Mexican drug lord, at which point the CIA “became enmeshed in the drug intrigues and protection of the DFS”. By 1950, Mexican drug lords were receiving narcotics from the Lansky-Luciano connection, which stretched to the Far East.

The CIA’s involvement in the Far East drug trade began with its predecessor organization, the Office of Strategic Services (“OSS”), which supplied Iranian opium to Burmese guerrillas fighting the Japanese. This is no secret: General William Peers, commander of OSS Detachment 101 in Burma, confessed in his autobiography: “If opium could be useful in achieving victory, the pattern was clear. We would use opium.” {4}

OSS chief William Donovan and Chiang’s intelligence chief, General Tai Li, tried hard to control drug trafficking in China during the war. To ensure security for KMT smuggling operations, the Americans sent a team to Chungking to train Chiang’s secret political police force. The head of the team, Charles Johnston, was described as previously having spent fifteen years “in the narcotics game” {5}.

Johnston’s team and Tai Li’s agents worked closely with Chiang’s designated drug smuggler Du Yue-sheng. Tai Li’s agents escorted Du’s opium caravans from Yunnan to Saigon, where the Kuomintang used Red Cross operations as a front for selling opium to the Japanese. In so far as national security always trumps drug law enforcement, this operation was afforded the same immunity as OSS Detachment 101.

After the war, the Americans did nothing to stop the French from importing tons of opium from Laos and selling it on the black market to finance their colonial war against the Vietnamese. During a visit to Saigon in 1948, an FBN agent reported that opium was “the greatest single source of revenue” for the French {6}.

CIA drug ops took a great leap forward in 1949, hen Mao chased Chiang to Taiwan, where KMT gangsters slaughtered thousands of people and set up a worldwide drug ring. To facilitate this particular criminal conspiracy in the name of freedom and democracy, US officials exempted a subsidiary of William Donovan’s World Commerce Corporation from the Foreign Agents Registration Act, so it could supply the KMT with everything from gas masks to airplanes. This subsidiary was accused of smuggling “contraband” to America.

Some of the “contraband” no doubt emanated from the KMT’s 93rd Division, which had fled from Yunnan into Burma in 1949. In exchange for launching covert raids into China, these enterprising KMT forces were allowed to grow and export opium onto the black-market in Bangkok and Hong Kong. In the same way the Israeli Lobby blackmails and bribes Congress to achieve its criminal ends, the US China Lobby attacked KMT critics and launched a massive propaganda campaign citing the People’s Republic as the source of all the illicit dope that reached San Francisco.

To facilitate the drug trade emanating from its KMT army in Burma, the China Lobby raised five million dollars of private money, which the CIA used to create its drug smuggling airline Civil Air Transport (“CAT”). The aforementioned General William Peers, as CIA station chief in Taipai, arranged for CAT to support KMT incursions from Burma into Yunnan – and thus enabled the KMT to bring to market “a third of the world’s illicit opium supply” {7}.

When Burma charged the KMT with opium smuggling in 1953, the CIA requested “a rapid evacuation in order to prevent the leakage of information about the KMT’s opium business”. The State Department announced that KMT troops were being airlifted by the CAT to Taiwan, but most remained in Burma or were relocated to northern Thailand with the consent of Thailand’s top policeman and drug lord. US Ambassador William J Sebald wasn’t fooled by this chicanery, and rhetorically asked if the CIA had deliberately left the KMT troops behind in Burma to continue “the opium smuggling racket” {8}.

Suborning the Police

The story of the CIA’s drug empire is the biggest cover-up in American history – even though the basic facts are available in books like Al McCoy’s The Politics of Heroin in Southeast Asia (2003) and Richard M Gibson’s The Secret Army (2011).

Organizing the cover-up initially depended on the CIA’s ability to suborn the Federal Bureau of Narcotics, which, as the conflict in Vietnam heated up, was forced to investigate the flow drugs from the Far East to America. Thus, in 1963, FBN headquarters sent Agent Sal Vizzini to Thailand to open an office in Bangkok. As Vizzini told me, “Customs was already in Vietnam, but only under the aegis of helping the soldiers. Apart from that, no one’s making cases in Vietnam, because the CIA is escorting dope to its warlords.”

Vizzini’s assertion was validated on 30 August 1964, when Major Stanley C Hobbs was caught smuggling 57 pounds of opium from Bangkok to a clique of South Vietnamese officers in Saigon. Hobbs had flown into Saigon on the CIA’s new drug smuggling airline, Air America. Hobbs’s court martial was conducted in secret and the defense witnesses were all US army and South Vietnamese intelligence officers. The records of the trial were dutifully lost and Hobbs was fined a mere three thousand dollars and suspended from promotion for five years. As a protected CIA drug courier, he served no time.

The FBN Commissioner wrote a letter to Senator Thomas J Dodd asking for help obtaining information about Hobbs. But Dodd was stonewalled too, proving that the CIA is able to subvert drug law enforcement at the highest legislative level in the nation.

Later in 1963, FBN Agent Bowman Taylor replaced Sal Vizzini in Bangkok. Taylor was famous for slipping into Laos and making a case on General Vang Pao, commander of the CIA’s private army of indigenous, opium-growing tribesmen. Taylor didn’t know the identity of the person he was buying from: he simply set up an undercover buy, got a flash roll together, and went to “the meet” covered by the Vientiane police. But when the seller stepped out of his car and opened the trunk, and the police saw who it was, they ran away, leaving Taylor to bust the felonious general alone.

“Yep, I made a case on Vang Pao and was thrown out of the country as a result”, Taylor acknowledged. “The prime minister gave him back his Mercedes Benz and morphine base, and the CIA sent him to Miami for six months to cool his heels. I wrote a report to the Commissioner, but when he confronted the CIA, they said the incident never happened.

“The station chiefs ran things in Southeast Asia”, Taylor stressed, adding that the first secretary at the Vietnamese Embassy in Bangkok had a private airline for smuggling drugs to Saigon, as the CIA was well aware. “I tried to catch him, but there was no assistance. In fact, the CIA actively supported the Thai Border Police, who were involved in trafficking.”

Taylor shrugged. “The CIA would do anything to achieve its goals”.

The 118A Strategic Intelligence Network

Not only was the CIA protecting Vietnamese warlords, their Corsican accomplices, and its private armies of opium growers in Laos, Burma, and Thailand, it was managing the caravan that moved opium to the world’s biggest market in Houei Sai, Laos.

In 1991, in Chiang Mai, Thailand, I interviewed William Young, the CIA officer who set the operation up.

The son of an American missionary in Burma, Young had learned the local dialects before he mastered English. During World War Two, his family was forced to move to Chiang Mai in northern Thailand, where Young’s father taught William Donovan the intricacies of the region’s opium business.

Following a tour of duty with the US Army in Germany, Young was recruited into the CIA and in 1958, posted to Bangkok then Chiang Mai. From Chiang Mai, Young led a succession of CIA officers to the strategically placed Laotian and Burmese villages that would eventually serve as Agency bases.

It was Young who introduced General Vang Pao to his first official CIA case officer.

From his headquarters at the CIA airbase at Long Tieng, on the south side of the opium-rich Plain of Jars, Vang Pao conscripted 30,000 tribesmen, many as young as thirteen, into a secret army to fight the Pathet Lao and its Vietnamese allies. In exchange for selling his people as cannon fodder, he was allowed to make a fortune selling opium. Much of the brokering was done at the village of Houei Sai in western Laos. Pao’s front man was the chieftain of the local Yao tribe, but behind the scenes Young set up deals between Pao, the top Laotian generals and politicians, and the KMT generals inside Burma. The Burmese generals operated clandestine CIA radio listening posts inside Burma, and in return were allowed to move ninety percent of the opium that reached Houei Sai.

It was a happy arrangement until October 1964, when the Chinese detonated an atomic bomb at Lop Nor. That seminal event signaled a need for better intelligence inside China, and resulted in the CIA directing Young to set up a strategic intelligence network at Nam Yu (aka Base 118), a few miles north of Houei Sai. The purpose of the 118A Strategic Intelligence Network was to use a KMT opium caravan to insert agents inside China. The agents placed by Young in the caravan were his childhood friends, Lahu tribesmen Moody Taw and Isaac Lee. Young equipped them with cameras, and while in China they photographed Chinese engineers building a road toward the Thai border, as well as Chinese soldiers massing along it. Knowing the number and location of these Chinese troops helped the CIA plot a strategy for fighting the Vietnam War.

Once the 118A network was up and running, Young turned it over to CIA officer Lou Ojibwe and, after Ojibwe was killed in the summer of 1965, Anthony Poshepny took charge. A Marine veteran who served with the CIA in the Indonesia and Tibet, “Tony Poe” was the balding, robust model for Marlon Brando’s Colonel Kurtz in Apocalypse Now (1979)! Poe also served as a father figure to the junior CIA officers (including Terry Burke, a future acting chief of the Drug Enforcement Administration, “DEA”) he commanded in the jungles of Laos.

When I interviewed Poe in Udorn, Thailand in 1991, he said he “hated” Vang Pao because he was selling guns to the Communists. But Poe was a company man, and he made sure the CIA’s share of opium was delivered from Nam Yu to the airfield at Houei Sai. The opium was packed in oil drums, loaded on C-47s, and flown by KMT mercenaries to the Gulf of Siam. The oil drums were dropped into the sea and picked up by accomplices in sampans waiting at specified coordinates. The opium was ferried to Hong Kong, where it was cooked into heroin by KMT chemists and sold to the Mafia and Corsicans.

FBN Agent Albert Habib, in a Memorandum Report dated 27 January 1966, cited CIA officer Don Wittaker as confirming that opium drums were dropped from planes, originating in Laos, to boats in the Gulf of Siam. Wittaker identified the chemist in Houei Sai, and fingered the local Yao leaders as the opium suppliers.

By 1966, when FBN Agent Douglas Chandler arrived in Bangkok, the existence of the CIA’s 118A opium caravan was a known fact. As Chandler recalled, “An interpreter took me to meet a Burmese warlord in Chiang Mai. Speaking perfect English, the warlord said he was a Michigan State graduate and the grandson of the king of Burma. Then he invited me to travel with the caravan that brought opium back from Burma.” Chandler paused for effect. “When I sent the information to the CIA, they looked away, and when I told the embassy, they flipped out. We had agents in the caravan who knew where the Kuomintang heroin labs were located, but the Kuomintang was a uniformed army equipped with modern weapons, so the Thai government left them alone.”

As described by Young and Poe, the 118A Strategic Intelligence Network was the CIA’s private drug channel to its Mafia partners in Hong Kong – people like Santo Trafficante, the Mafia boss the CIA hired to kill Fidel Castro, and protected ever thereafter. The same thing is happening today in Afghanistan, with the DEA providing cover for the CIA and military, just as the FBN did in the 1960s.

Which brings me back to Gary Webb. The CIA wasn’t happy that Poe and Young were talking. Poe was told to shut up after his chat with me, and he did. But Young sold his story to a major Hollywood studio for $100,000. And that was unforgivable.

On April Fool’s Day, 2011, Thai police found Bill Young’s corpse. It had been perfectly arranged with a pistol in his one hand and a crucifix in the other.

Maybe he was depressed too?

And it is seriously depressing, the fact our utterly corrupt government, aided by its criminal co-conspirators in the mainstream media, pretends as if the CIA doesn’t deal drugs.


Doug Valentine is the author of The Strength of the Wolf: The Secret History of America’s War on Drugs, and The Strength of the Pack: The Personalities, Politics, and Espionage Intrigues that Shaped the DEA.


{1} Douglas Clark Kinder and William O Walker III, “Stable Force In a Storm: Harry J Anslinger and United States Narcotic Policy, 1930-1962”, The Journal of American History, Volume 72, Number 4, March 1986, page 919, note.

{2} Ed Reid, The Mistress and the Mafia (1972), page 42.

{3} Reid, Mistress, page 90.

{4} William Peers and Dean Brellis, Behind The Burma Road (1963), page 64.

{5} Milton Miles, A Different Kind of War (1967).

{6} William O Walker, Opium and Foreign Policy (1991), page 177.

{7} Burton Hersh, The Old Boys: The American Elite and the Origins of the CIA (1992). page 300.

{8} Walker, Opium, page 210.

Categories: Uncategorized

High-Ranking CIA Agent Blows Whistle …

… on the Deep State And Shadow Government

by Aaron Kesel (September 15 2017)

Zero Hedge (September 15 2017)

A CIA whistleblower, Kevin Shipp, has emerged from the wolves den to expose the deep state and the shadow government which he calls two entirely separate entities.

“The shadow government controls the deep state and manipulates our elected government behind the scenes”, Shipp warned in a recent talk at a {1} conference.

Shipp had a series of slides explaining how the deep state and shadow government functions as well as the horrific crimes they are committing against US citizens.

Some of the revelations the former CIA anti-terrorism counterintelligence officer revealed included that “Google Earth was set up through the National Geospatial Intelligence Agency (“NGA”) and InQtel”. Indeed he is correct, the CIA and NGA owned the company Google acquired, Keyhole Inc {2}, paying an undisclosed sum for the company to turn its technology into what we now know as Google Earth. Another curious investor in Keyhole Inc was none other than the venture capital firm In-Q-Tel run by the CIA according to a press release {3} at the time.

Shipp also disclosed that the agency known as the Joint Special Ops Command (“JSOC”) is the “president’s secret army” which he can use for secret assassinations, overturning governments and things the American people don’t know about.

FBI warrantless searches violate the Fourth Amendment with national security letters, which Shipp noted enables them to walk into your employer’s office and demand all your financial records and, if he or she says anything about them being there, they can put your supervisor in jail or drop a case against themselves using the “State’s Secret Privilege law”.

“The top of the shadow government are the National Security Agency and the Central Intelligence Agency”, Shipp said.

Shipp expressed that the CIA was created through the Council on Foreign relations with no congressional approval, and historically the Council on Foreign relations is also tied into the mainstream media. He elaborated that the CIA was the “central node” of the shadow government and controlled all of other sixteen intelligence agencies despite the existence of the Director of National Intelligence. The agency also controls defense and intelligence contractors, can manipulate the president and political decisions, has the power to start wars, torture, initiate coups, and commit false flag attacks he said.

As Shipp stated, the CIA was created through executive order by then-President Harry Truman by the signing of the National Security Act of 1947 {4}.

According to Shipp, the deep state is comprised of the military industrial complex, intelligence contractors, defense contractors, Military Industrial Complex lobbyists, Wall Street (offshore accounts), Federal Reserve, IMF/World Bank, Treasury, Foreign lobbyists, and Central Banks.

In the shocking, explosive presentation, Shipp went on to express that there are “over 10,000 secret sites in the US” that were formed after 9/11. There are “1,291 secret government agencies, 1,931 large private corporations and over 4,800,000 Americans that he knows of who have a secrecy clearance, and 854,000 who have Top Secret clearance, explaining they signed their lives away bound by an agreement.

He also detailed how Congress is owned by the Military Industrial Complex through the Congressional Armed Services Committee (48 senior members of Congress) giving those members money in return for a vote on the spending bills for the military and intelligence budget.

He even touched on what he called the “secret intelligence-industrial complex”, which he called the center of the shadow government including the CIA, NSA, NRO, and NGA.

Shipp further stated that around the “secret intelligence-industrial complex” you have the big five conglomerate of intelligence contractors – Leidos Holdings, CSRA, CACI, SAIC, and Booz Allen Hamilton. He noted that the work they do is “top secret and unreported”.

The whistleblower remarked that these intelligence contractors are accountable to no one including Congress, echoing the words of Senator Daniel Inouye when he himself blew the whistle on the shadow government during the Iran-Contra hearings in 1987.

At the time Inouye expressed that the “shadow government had its own funding mechanism, shadowy Navy, and Air Force freedom to pursue its own goals free from all checks and balances and free from the law itself”.

Shipp further added that the shadow government and elected government were in the midst of a visible cold war.

So who is Shipp and is he credible as a whistleblower, does he have credentials for the CIA? wrote {5}:

Shipp held several high-level positions in the CIA. He was assigned as a protective agent for the Director of Central Intelligence, a counterintelligence investigator, a Counter Terrorism Center officer, a team leader protecting sensitive CIA assets from assassination, a manager of high-risk protective operations, a lead instructor for members of allied governments, an internal staff security investigator, and a polygraph examiner. He was tasked with protecting the CIA from foreign agent penetration and the chief of training for the CIA federal police force. Mr Shipp functioned as program manager for the Department of State, Diplomatic Security, and Anti-Terrorism Assistance global police training program. He is the recipient of two CIA Meritorious Unit Citations, three Exceptional Performance Awards and a Medallion for overseas covert operations. He is the author of From the Company of Shadows–CIA Operations and the War on Terrorism {6}.

Shipp noted he was working with former NSA whistleblower William Binney but didn’t state what the two were working on together. Shipp is highly credible and may just be the highest level whistleblower. This leak is huge. He has been previously mentioned {7} in The New York Times for blowing the whistle on the mistreatment of him and his family when they were put in a mold-contaminated home. He is also mentioned in a WikiLeaks cable {8} during the GiFiles that I was able to dig up. Is this the beginning of whistleblowers coming forward to end the shadow government and deep state? You can watch Shipp’s full explosive presentation below.










Categories: Uncategorized

The Russian Hacking Story Continues to Unravel

by Mike Whitney

CounterPunch (September 14 2017)

Photo by sime simon | CC BY 2.0

A new report by a retired IT executive at IBM debunks the claim that Russia interfered in the 2016 presidential campaign by hacking Democratic computers and circulating damaging information about Hillary Clinton. The report, which is titled “The Non-Existent Foundation for Russian Hacking Charge”, provides a rigorous examination of the wobbly allegations upon which the hacking theory is based, as well as a point by point rejection of the primary claims which, in the final analysis, fail to pass the smell test. While the report is worth reading in full, our intention is to zero-in on the parts of the text that disprove the claims that Russia meddled in US elections or hacked the servers at the Democratic National Committee (“DNC”).

Let’s start with the fact that there are at least two credible witnesses who claim to know who took the DNC emails and transferred them to WikiLeaks. We’re talking about WikiLeaks founder Julian Assange and WikiLeaks ally, Craig Murray. No one is in a better position to know who actually took the emails than Assange, and yet, Assange has repeatedly said that Russia was not the source. Check out this clip from the report:

Assange … has been adamant all along that the Russian government was not a source; it was a non-state player …

Assange: Our source is not a state party

Hannity (Conservative talk show host): Can you say to the American people unequivocally that you did not get this information about the DNC, John Podesta’s emails – can you tell the American people 1,000 percent you did not get it from Russia …

Assange: Yes.

Hannity: … or anybody associated with Russia?

Assange: We – we can say and we have said repeatedly … over the last two months, that our source is not the Russian government and it is not a state party … {1}

Can you think of a more credible witness than Julian Assange? The man has devoted his entire adult life to exposing the truth about government despite the risks his actions pose to his own personal safety. In fact, he is currently holed up at the Ecuador embassy in London for defending the public’s right to know what their government is up to. Does anyone seriously think that a man like that would deliberately lie just to protect Russia’s reputation?

No, of course not, and the new report backs him up on this matter. It states: “Nowhere in the Intelligence Community’s Assessment (“ICA”) was there any evidence of any connection between Russia and WikiLeaks”. The reason Assange keeps saying that Russia wasn’t involved is because Russia wasn’t involved. There’s nothing more to it than that.

As for the other eyewitness, Craig Murray, he has also flatly denied that Russia provided WikiLeaks with the DNC emails. Check out this excerpt from an article at The Daily Mail:

(Murray) flew to Washington, DC for emails … He claims he had a clandestine hand-off … near American University with one of the email sources. Murray said the leakers’ motivation was ‘disgust at the corruption of the Clinton Foundation’ and the ’tilting of the primary election playing field against Bernie Sanders’ …

Murray says: “The source had legal access to the information. The documents came from inside leaks, not hacks. Regardless of whether the Russians hacked into the DNC, the documents Wikileaks published did not come from that”,’ Murray insists ….

Murray said he was speaking out due to claims from intelligence officials that Wikileaks was given the documents by Russian hackers as part of an effort to help Donald Trump win the US presidential election.

“I don’t understand why the CIA would say the information came from Russian hackers when they must know that isn’t true”, he said. “Regardless of whether the Russians hacked into the DNC, the documents Wikileaks published did not come from that”. {2}


Is Craig Murray, the former British ambassador to Uzbekistan and human rights activist, a credible witness?

There’s one way to find out, isn’t there? The FBI should interview Murray so they can establish whether he’s telling the truth or not. And, naturally, one would assume that the FBI has already done that since the Russia hacking story has been splashed across the headlines for more than a year now.

But that’s not the case at all. The FBI has never questioned Assange or Murray, in fact, the FBI has never even tried to get in touch with either of them. Never. Not even a lousy phone call. It’s like they don’t exist.

Why? Why hasn’t the FBI contacted or questioned the only two witnesses in the case?

Could it be because Assange and Murray’s knowledge of the facts don’t coincide with the skewed political narrative the Intel agencies and their co-collaborators at the DNC want to propagate? Isn’t that what’s really going on? Isn’t Russia-gate really just a stick for beating Russia and Trump? How else would one explain this stubborn unwillingness of the FBI to investigate what one senator called “The crime of the century”?

Here’s something else from the report that’s worth mulling over:

It is no secret that NSA has the technology to trace a web event, for example, a cyber attack, back to its source. There has been no public claim, nor is it implied in either Grizzly Steppe or the ICA that the NSA has trace routing to Russia on any of these purported Russian hacks. {1}

This is a crucial point, so let’s rephrase that in simple English. What the author is saying is that: If Russia hacked the DNC computers, the NSA would know about it. It’s that simple.

But no one at the NSA has ever verified the claims or produced one scintilla of evidence that connects Russia to the emails. In fact, the NSA has never even suggested that such evidence exists. Nor has anyone in the media asked Director Michael Rogers point-blank whether the NSA has hard evidence that Russia hacked the DNC servers?

Why? Why this conspiracy of silence on a matter that is so fundamental to the case that the NSA and the other Intel agencies are trying to make?

The only logical explanation is that there’s no proof that Russia was actually involved. Why else would the NSA withhold evidence on a matter this serious? It makes no sense.

According to the media, Intelligence agents familiar with the matter have “high confidence” that Russia was involved.

Okay, but where’s the proof? You can’t expect to build a case against a foreign government and a sitting president with just “high confidence”. You need facts, evidence, proof. Where’s the beef?

We already mentioned how the FBI never bothered to question the only eyewitnesses in the case. That’s odd enough, but what’s even stranger is the fact that the FBI never seized the DNC’s servers so they could conduct a forensic examination of them. What’s that all about? Here’s an excerpt from the report:

The FBI, having asked multiple times at different levels, was refused access to the DNC server(s). It is not apparent that any law enforcement agency had access.

The apparent single source of information on the purported DNC intrusion(s) was from Crowdstrike.

3. Crowdstrike is a cybersecurity firm hired by the Democratic Party.

4. Not the FBI, CIA, nor NSA organizations analyzed the information from Crowdstrike. Only picked analysts of these agencies were chosen to see this data and write the ICA … {1}



Have you ever read anything more ridiculous in your life? The FBI’s negligence in this case goes beyond anything I’ve ever seen before. Imagine if a murder was committed in the apartment next to you and the FBI was called in to investigate. But when they arrive at the scene of the crime, they’re blocked at the door by the victim’s roommate who refuses to let them in. Speaking through the door, the roommate assures the agents that the victim was shot dead with a single bullet to the head and that the smoking gun that was used in the murder is still on the floor. But “don’t worry”, says the obstructing roommate, “I’ve already photographed the whole thing and I’ll send you the pictures as soon as I get the chance”.

Do you really think the agents would put up with such nonsense?

Never! They’d kick down the door, slap the roommate in handcuffs, cordon-off the murder scene, and start digging around for clues. That’s what they’d do. And yet we are supposed to believe that in the biggest case of the decade, a case that that allegedly involves foreign espionage and presidential treason, that the FBI has made no serious effort to secure the servers that were allegedly hacked by Russia?

The DNC computers are Exhibit A. The FBI has to have those computers, and they are certainly within their rights to seize them by any means necessary. So why haven’t they? Does the FBI think they can trust the second-hand analysis from some flunkey organization whose dubious background casts serious doubt on their conclusions?

It’s a joke! The only rational explanation for the FBI’s behavior, is that they’ve been told to “stand down” so they don’t unwittingly expose the truth about what’s really going on, that the whole Russia hacking fiction is a complete and utter fraud, and that the DNC, the CIA, and the media are all having a good laugh at the expense of the clueless American people.

Here’s another interesting clip from the report:

Adam Carter: … the FBI does not have disk images from any point during or following the alleged email hack … CrowdStrike’s failure to produce evidence. – With Falcon installed between April and May (early May), they should have had evidence on when files/emails/etc were copied or sent. – That information has never been disclosed. {1}


Read that excerpt over again. It’s mind-boggling. What Carter is saying is that they have nothing, no evidence, no proof, no nothing. If you don’t have a disk image, then what do you have?

You have nothing, that’s what. Which means that everything we’ve read is 100 percent conjecture, not a shred of evidence anywhere. Which is why the focus has shifted to Manafort, Flynn, Trump Jr, and the goofy Russian lawyer?

Who gives a rip about Manafort? Seriously?

The investigation started off with grave allegations of foreign espionage and presidential collusion (treason?) and quickly downshifted to the illicit financial dealings of someone the American people could care less about. Talk about mission creep!

What people want is proof that Russia hacked the DNC servers or that Trump cozied up to Russia to win the election. Nothing else matters. All these diversions prove is that, after one full year of nonstop, headline sensationalism, the investigation has produced nothing; a big, fat goose-egg.

A few words about the ICA Report

Remember the January 6, Intelligence Community Assessment? The ICA report was supposed to provide iron-clad proof that Russia hacked Democratic emails and published them at WikiLeaks. The media endlessly reiterated the claim that all seventeen US intelligence agencies took part in the assessment and that it’s conclusions represented the collective, objective analysis of America’s finest.

Right. The whole thing was a fraud. As it happens, only four of the agencies participated in the project (the CIA, the NSA, the FBI, and the Office of the Director of National Intelligence) and the agents who provided the analysis were hand-picked for the task. Naturally, when a director hand-picks particular analysts for a given assignment, one assumes that they want a particular outcome. Which they did. Clearly, in this case, the intelligence was tailored to fit the policy. The intention was to vilify Russia in order to further isolate a country that was gradually emerging as a global rival. And the report was moderately successful in that regard too, except for one paradoxical disclaimer that appeared on page 13. Here it is:

Judgments are not intended to imply that we have proof that shows something to be a fact … Assessments are based on collected information, which is often incomplete or fragmentary, as well as logic, argumentation, and precedents …


What the authors are saying is that “Everything you read in this report could be complete baloney because it’s all based on conjecture, speculation, and guesswork”.

Isn’t that what they’re saying? Why would anyone waste their time reading a report when the authors openly admit that their grasp of what happened is “incomplete or fragmentary” and they have no “proof” of anything?

Gregory Copley, President, International Strategic Studies Association (“ISSA”) summed it up best when he said:

This is a highly politically motivated and a subjective report which was issued by the intelligence community … does not present evidence of success or even an attempt to actually actively manipulate the election process.


Like we said, it’s all baloney.

Lastly, Folden’s report sheds light on the technical inconsistencies of the hacking allegations. Cyber-forensic experts have now shown that:

The alleged “hack” was effectively impossible in mid-2016. The required download speed of the “hack” precludes an internet transfer of any significant distance.


In other words, the speed at which the emails were transferred could only have taken place if they were “Downloaded onto external storage, for example, 2.0 thumb drive”. (The report also provides evidence that the transfers took place in the Eastern time zone, which refutes the theory that the servers were hacked from Romania.)

The Nation summed it up perfectly in this brief paragraph:

There was no hack of the Democratic National Committee’s system on July 5 last year – not by the Russians, not by anyone else. Hard science now demonstrates it was a leak – a download executed locally with a memory key or a similarly portable data-storage device. In short, it was an inside job by someone with access to the DNC’s system. {3}



Bottom line: A dedicated group of independent researchers and former Intel agents joined forces and produced the first hard evidence that “the official narrative implicating Russia” is wrong. This is a stunning development that will, in time, cut through the fog of government propaganda and reveal the truth. Skip Folden’s report is an important contribution to that same effort.

Note: Skip Folden is a Private Intelligence analyst and a retired IBM Program Manager for Information Technology. His report has been submitted to the House and Senate Intelligence Committees, the Office of Special Counsel (Robert Mueller), and the Deputy Attorney General, Rod Rosenstein. The report was released on September 13 2017.

Read the whole report at {1}.





Categories: Uncategorized